Overdrive Magazine

Overdrive February 2019

Contents of this Issue

Navigation

Page 25 of 67

24 |
Overdrive
| February 2019
The U.S. Supreme Court ruled in
January that legal disputes between
carriers and independent contrac-
tors cannot be forced into arbitration
even if their contractor agreements
include an arbitration clause.
In an 8-0 decision, the nation's
high court sided with owner-operator
Dominic Oliveira over his carrier,
New Prime Inc., the legal name for
Springfield, Missouri-based Prime
Inc., which has contracts with more
than 5,000 independent contractors.
The question before the court was
whether arbitration clauses within
contracts between fleets and inde-
pendent contractors are binding.
Oliveira sought to have a lawsuit he
brought against New Prime in 2015
over his employment status heard
in court. New Prime argued that his
lawsuit was bound to arbitration, per
the arbitration clause within his con-
tract with the company.
In that original lawsuit, Oliveira
claimed he was a company driver and
an employee of Prime but that he was
misclassified as an independent con-
tractor. The Supreme Court ruled not
on that matter, but simply on wheth-
er Oliveira could pursue his challenge
via the courts instead of arbitration.
Braden Core, a transportation
attorney at the firm Scopelitis,
Garvin, Light, Hanson & Feary,
described the ruling as "a broad hold-
ing that applies across the country" to
"any owner-operator who looks like
the plaintiff in the case — a one-man
one-truck operation in which he was
personally driving the truck."
The justices answered only the
"narrow questions" brought before
it, Core says: whether independent
contractors have a "contract of
employment" with their carriers, and
whether contractors are exempt from
the 1925 Federal Arbitration Act.
The court answered yes to both
questions. Now, lawsuits made
against fleets from owner-operators
can't be forced into arbitration, even
if their contractor agreements include
an arbitration clause. Instead, courts
will determine whether lawsuits
brought by contractors against their
carriers will be heard in court or by
an arbitrator.
However, the decision only applies
to federal law. That means its impact
on independent contractor agree-
ments could be limited, as fleets still
could try to force arbitration under
state law, says Bob Roginson, chair
of the trucking and logistics group at
the Ogletree Deakins law firm.
"It does not impact [carriers']
ability to rely on state law," he said.
"Carriers are going to need to go
back and look at state arbitration laws
in the states where they operate or
where they have these agreements."
Jennifer Bennett, an attorney for
the nonprofit group Public Justice
and a member of Oliveira's legal
team, said Oliveira's original law-
suit regarding his classification as
a contractor now can proceed in
court. "This decision will enable
so many drivers like Dominic who
are not being paid what the law
requires to go to court and fight for
their rights," Public Justice said in a
statement.
Justice Neil Gorsuch wrote the opin-
ion for the Supreme Court. "The par-
ties' private agreement may be crystal
clear and require arbitration of every
question under the sun, but that does
not necessarily mean the Act authoriz-
es a court to stay litigation and send the
parties to an arbitral forum," he writes.
Gorsuch added that Prime's arguments
weren't "compelling."
Lower courts also ruled in favor of
Oliveira.
Owner-operator wins in
key arbitration decision
Attorney Braden Core described the
U.S. Supreme Court ruling in the
Prime case as "a broad holding that
applies across the country."
B U S I N E S S
BY JAMES JAILLET